IRA Ideal!
Defined Asset Funds[SM]
The Select Growth Portfolio
1998 Series B
A
Disciplined
Approach
to
Growth
Stock
Investing
[Logo] Merrill Lynch
Select Growth Portfolio
Deciding which investments may support your long-term investment objectives at
a level of risk that is acceptable to you can be difficult. This is
particularly true if you're interested in incorporating aggressive growth
stocks into your portfolio. While many mutual funds and money managers follow
a "growth stock" investment style, there is no generally accepted definition
of a growth stock and no easy way to select them. That's why we developed the
Select Growth Portfolio. It's designed to provide definition and discipline to
aggressive growth stock investing.
How The Portfolio Was Selected
A quantitative selection model was developed by O'Shaughnessy Capital
Management, Inc., a registered investment advisor (the Portfolio Consultant).
This model was used to screen a universe of 5,123 stocks and identify growth
stocks believed to be reasonably priced and have attractive growth potential.
Here's How It Worked:
First, growth was defined by selecting stocks with consensus estimated earnings
per share growth of 20% for the next year. Then, to give a longer-term view and
to avoid short-term run ups, the Portfolio Consultant screened for a 20%
estimated consensus earnings per share growth for the next 3 to 5 years.
Second, value was considered by selecting growth stocks with Price to Earnings
Ratios not exceeding their estimated 3 to 5 year earnings growth rates. This
was to remove expensive stocks.
Third, relative strength was determined by separating out stocks with strong
price performance over the prior six months.
Fourth, the Portfolio Consultant weeded out the smaller companies with market
capitalization below $750 million.
Finally, the 10 stocks considered most attractive were selected by the
Sponsors.
The securities will be selected and held without regard to any buy or sell
recommendations of any of the Sponsors.
Investor Profile
This Portfolio is targeted to investors whose primary objective is long-term
growth. The investor should have the willingness and ability to withstand
extreme price volatility from aggressive growth stocks for the potential of
greater rewards over time. Investors are encouraged to follow the Strategy for
at least three years.
Past Performance of Prior Select Growth Portfolios
The chart below shows average annual total returns for the following Series,
which assume annual "rollovers" into the next Portfolio. We've also included
returns for the most recently completed Portfolio of each Series.
Series From Inception Through 3/31/98
- --------------------------------------------------------------
Inception Return
02/14/95 Series A 22.72%
06/06/95 Series B 22.04%
08/01/95 Series C 1.58%
11/01/95* Series D 14.16%
Most Recently Completed Portfolio
- --------------------------------------------------------------
Period Return
02/10/97-03/13/98 Series A 33.77%
05/01/96-06/13/97 Series B 18.01%
08/12/96-09/12/97 Series C 98.34%
11/12/96-12/19/97 Series D 21.25%
*'95 Series 4 (SGP004) rolled into '96 Series D (SGP96D)
Past performance is no guarantee of future results. Average annual total
returns represent price changes plus dividends reinvested, divided by the
initial public offering price, and reflect maximum sales charges and expenses.
Returns for Series From Inception differ from Most Recently Completed
Portfolio because the former figures reflect a reduced sales charge on
rollovers and different performance periods.
Defined Strategy
The Select Growth Portfolio is based on the Strategy of buying 10 screened
growth stocks and holding them for about a year. At the end of the year, we
expect to select a new Portfolio through reapplication of the Strategy and you
may reinvest in the new Portfolio, if available.
This is a one-year investment but, like all equity investing, a longer-term
view is appropriate. To reduce the effect of short-term volatility, the
Sponsors suggest that investors follow the Strategy for at least three years.
There can be no guarantee that the Portfolio will achieve its objective over
its one-year life or over consecutive one-year periods.
Defined Portfolio
This pre-selected portfolio will remain relatively fixed throughout its
one-year life. You will always know how your dollars are invested.
Convenience Defined
One advantage of our fixed portfolio of growth stocks is the convenience of
acquiring a portfolio of securities through one purchase. The Portfolio
invests in 10 stocks but makes it easy with only one price to track. Prices
are quoted weekly in Barron's.
No Sell Decisions
The Portfolio will follow a disciplined strategy of buying and holding for
about one year. You may also have the option of reinvesting after a year to
continue with the Strategy.
Low Cost
The minimum amount required to purchase this investment is $250.
The Portfolio
1. AccuStaff, Inc.
(ASI) Provides business services, including consulting, training,
outplacement, outsourcing, and strategic staffing services to
businesses, professional and service organizations and governmental
agencies. The Company's network consists of over 1,000 offices.
2. Barr Laboratories, Inc.
(BRL) Develops, manufactures and markets generic pharmaceuticals. Its
products are primarily focused on the treatment of cancer, hormone
replacement therapies, pain management products, medicines for
hypertension and heart disease, and antibiotics and medicine to combat
infections.
3. Biogen, Inc.
(BGEN) Develops, manufactures and markets drugs for human health
care. The Company focuses on developmental biology and gene therapy
and sells "AVONEX" to treat relapsing forms of multiple sclerosis.
4. Federal-Mogul Corporation**
(FMO) Manufactures and distributes precision parts, primarily vehicular
components. It also engineers products for original equipment
manufacturers of automobiles, light and heavy trucks, construction
vehicles and industrial products.
5. Gartner Group, Inc.
(GART) Provides information technology advisory, measurement,
research, decision support, analysis, consulting and training products
and services. It serves more than 8,300 client organizations with
analysts in 75 locations worldwide.
6. General Nutrition Companies, Inc.
(GNCI) Through its subsidiaries, it retails vitamin, mineral and sports
nutrition supplements as well as personal care, fitness and other health-
related products. The Company sells its products through 3,121 retail
stores in the United States, Puerto Rico and 17 countries.
7. Kaufman and Broad Home Corporation**
(KBH) Builds single-family homes with domestic operations in seven
western states and international operations in France and Mexico.
8. MBNA Corporation**
(KRB) The parent company of MBNA America Bank, N.A. Through the
Bank, the Company issues premium and standard bank credit cards.
MBNA also provides retail deposits, individual loans, and card and
financial transactions processing.
9. Network Associates, Inc.
(NETA) Supplies enterprise network security and management solutions.
Its products are marketed under the brand names "Total Virus Defense,"
"Total Network Security," "Total Network Visibility" and "Total
ServiceDesk."
10. OfficeMax, Inc.
(OMX) Retails office products at high-volume and deep discounts. It
operates 713 stores in 48 states and Puerto Rico and has retail joint
ventures in Mexico and Japan. The Company owns and operates "Copy
Max", "TechMax" and "FurnitureMax."
DEFINED ASSET FUNDS SELECT GROWTH PORTFOLIO
Defining Your Risks
The following are important facts to keep in mind when considering this
investment for your portfolio. Please read them carefully. Your financial
professional will be happy to answer any questions you may have.
The Portfolio consists of aggressive growth stocks which are subject to extreme
price volatility. Therefore, the Portfolio should be considered speculative
and not a complete equity investment program
The Portfolio is designed for investors who can assume the risks associated
with equity investments. It is not appropriate for those seeking capital
preservation or high current income. U.S. equity markets have been at
historically high levels and no assurance can be given that these levels will
continue.
The value of your investment will fluctuate with the prices of the underlying
stocks. There can be no assurance that dividend rates or stock prices will not
decrease over the life of the Portfolio.
**Only these stocks currently pay dividends. The current annual dividends per
share for the Securities in Portfolio numbers 4, 7 and 8 are $0.01, $0.30 and
$0.36, respectively, based on the latest quarterly, semi-annual or annual
declaration; there can be no assurance that future dividend payments, if any,
will be maintained in an amount equal to these dividends.
The model and the Portfolio Consultant have a limited track record. Since
February 1995, when the first Portfolio was offered, the model has generally
underperformed the S&P 500 Index and other equity indexes.
It is unlikely that the Portfolio will change over its one-year life, even if
the stock market decreases in value or there are adverse developments
affecting the stocks held.
Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and the charge for organizational expenses. In
addition, the annual statement and the relevant tax reporting forms you
receive at year end will reflect the actual amount paid to you, net of the
deferred sales charge and the charge for organizational expenses. Accordingly,
you should not increase the tax basis in your units by these sales charges and
expenses.
Generally, dividends and any gains will be subject to tax each year. Capital
gains, if any, on assets held over a year will be taxed up to the maximum
federal tax rate of 28%. However, on rollovers to future Portfolios, if
available, investors will defer recognition of gains and losses on stocks that
are contributed in kind to the new Portfolio. Investors may also be eligible
for a 20% maximum federal tax rate on gains from those stocks when they are
sold.
Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy.
All investors pay a deferred sales charge of $17.50 per 1,000 units, about
1.75%, deducted over the last ten months of the Portfolio.
As a % of Public Amount per
Offering Price 1,000 Units
- -------------------------------------------------------------------------
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
---------------------------------
Maximum Sales Charge 2.75% $27.50
Estimated Annual Operating Expenses
(as a % of net assets) .392% $3.88
- -------------------------------------------------------------------------
If you sell your units before termination, the remaining balance of your
deferred sales charge will be deducted, along with the estimated costs of
selling Portfolio securities. If you roll over to a successor Portfolio, if
available, the initial charge will be waived. You will only pay the deferred
sales charge and operating expenses.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of
your investment dollars to work for you.
Amount Purchased Total Sales Charge as a % of
Public Offering Price
- -------------------------------------------------------------------------
Less than $50,000 2.75%
$50,000 to $99,999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
$1,000,000 or more 1.00%
Select Now
Call your financial professional to see how the Select Growth Portfolio can
fit into your financial plan. A free prospectus containing more complete
information, including all charges and expenses, is available. Read the
prospectus carefully before you invest.
Defined Asset Funds
Buy With Knowledge - Hold With Confidence
Select Ten Portfolios
Select Ten Portfolio
(DJIA)
Hong Kong Portfolio
(Hang Seng Index)
Japan Portfolio
(Nikkei Index)
United Kingdom Portfolio
(Financial Times Index)
Other Select Series
Select S&P Industrial
Portfolio
Select S&P Industry
Turnaround Portfolio
Select S&P Intrinsic Value
Portfolio
Equity Income Funds
Concept Series
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund 2
TeleoGlobal Trust 3
Equity Income Funds
Index Series
S&P 500 Index Trust 2
S&P MidCap Index Trust
Other Defined Asset Funds
Corporate Income Funds
Government Securities
Income Funds
International Bond Funds
Municipal Investment Trusts
11591BR-05/98
[Copyright] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member
SIPC.
